DEPOSIT GUARANTY NAT. BANK v. ROPER

MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.

We granted certiorari to decide whether a tender to named plaintiffs in a class action of the amounts claimed in their individual capacities, followed by the entry of judgment in their favor on the basis of that tender, over their objection, moots the case and terminates their right to appeal the denial of class certification.

I

Respondents, holders of credit cards issued on the "BankAmericard" plan by petitioner Deposit Guaranty National Bank, sued the bank in the United States District Court for the Southern District of Mississippi, seeking to represent both their own interests and those of a class of similarly aggrieved customers. The complaint alleged that usurious finance charges had been made against the accounts of respondents and a putative class of some 90,000 other Mississippi credit card holders.

Respondents' cause of action was based on provisions of the National Bank Act, Rev. Stat. §§ 5197, 5198, as amended, 12 U. S. C. §§ 85, 86. Section 85 permits banks within the coverage of the Act to charge interest "at the rate allowed by the laws of the State, Territory, or District where the bank is located." In a case where a higher rate of interest than allowed has been "knowingly" charged, § 86 allows a person who has paid the unlawful interest to recover twice the total interest paid.1

The modern phenomenon of credit card systems is largely dependent on computers, which perform the myriad accounting functions required to charge each transaction to the customer's account. In this case, the bank's computer was programmed so that, on the billing date, it added charges, subtracted credits, added any finance charges due under the BankAmericard plan, and prepared the customers' statements. During the period in question, the bank made a monthly service charge of 1 1/2% on the unpaid balance of each account. However, customers were allowed 30 days within which to pay accounts without any service charge. If payment was not received within that time, the computer added to the customer's next bill 1 1/2% of the unpaid portion of the prior bill, which was shown as the new balance. The actual finance charges paid by each customer varied depending on the stream of transactions and the repayment plan selected. In addition, the effective annual interest rate paid by a customer would vary because the same 1 1/2% service charge was assessed against the unpaid balance no matter when the charged transactions occurred within the 30-60-day period prior to the billing date. This 1 1/2% monthly service charge is asserted to have been usurious because under certain circumstances the resulting effective annual interest rate allegedly exceeded the maximum interest rate permitted under Mississippi law.

The District Court denied respondents' motion to certify the class, ruling that the circumstances did not meet all the requirements of Federal Rule of Civil Procedure 23 (b) (3).2 The District Court certified the order denying class certification for discretionary interlocutory appeal, pursuant to 28 U. S. C. § 1292 (b); the proceedings were stayed for 30 days pending possible appellate review of the denial of class certification.

The United States Court of Appeals for the Fifth Circuit denied respondents' motion for interlocutory appeal. The bank then tendered to each named plaintiff, in the form of an "Offer of Defendants to Enter Judgment as by Consent and Without Waiver of Defenses or Admission of Liability," the maximum amount that each could have recovered. The amounts tendered to respondents Roper and Hudgins were $889.42 and $423.54, respectively, including legal interest and court costs. Respondents declined to accept the tender and made a counteroffer of judgment in which they attempted to reserve the right to appeal the adverse class certification ruling. This counteroffer was declined by the bank.

Based on the bank's offer, the District Court entered judgment in respondents' favor, over their objection, and dismissed the action. The bank deposited the amount tendered into the registry of the court, where it remains. At no time has any putative class member sought to intervene either to litigate the merits or to appeal the certification ruling. It appears that by the time the District Court entered judgment and dismissed the case, the statute of limitations had run on the individual claims of the unnamed class members.3

When respondents sought review of the class certification ruling in the Court of Appeals, the bank argued that the case had been mooted by the entry of judgment in respondents' favor. In rejecting the bank's contention, the court relied in part on United Airlines, Inc. v. McDonald, 432 U.S. 385 (1977), in which we held that a member of the putative class could appeal the denial of class certification by intervention, after entry of judgment in favor of the named plaintiff, but before the statutory time for appeal had run. Roper v. Consurve, Inc., 578 F.2d 1106 (CA5 1978). Two members of the panel read Rule 23 as providing for a fiduciary-type obligation of the named plaintiffs to act in a representative capacity on behalf of the putative class by seeking certification at the outset of the litigation and by appealing an adverse certification ruling. In that view, the District Court also had a responsibility to ensure that any dismissal of the suit of the named plaintiffs did not prejudice putative class members. One member of the panel, concurring specially, limited the ruling on mootness to the circumstances of the case, i. e., that, after filing of a class action, the mere tender of an offer of settlement to the named plaintiffs, without acceptance, does not moot the controversy so as to prevent the named plaintiffs from appealing an adverse certification ruling.

Having rejected the bank's mootness argument, the Court of Appeals reviewed the District Court's ruling on the class certification question. It concluded that all the requisites of Rule 23 had been satisfied and accordingly reversed the adverse certification ruling; it remanded with directions to certify the class and for further proceedings.

Certiorari was sought to review the holdings of the Court of Appeals on both mootness and class certification. We granted the writ, limited to the question of mootness, to resolve conflicting holdings in the Courts of Appeals.4 440 U.S. 945.

II

We begin by identifying the interests to be considered when questions touching on justiciability are presented in the class-action context. First is the interest of the named plaintiffs: their personal stake in the substantive controversy and their related right as litigants in a federal court to employ in appropriate circumstances the procedural device of a Rule 23 class action to pursue their individual claims. A separate consideration, distinct from their private interests, is the responsibility of named plaintiffs to represent the collective interests of the putative class. Two other interests are implicated: the rights of putative class members as potential intervenors, and the responsibilities of a district court to protect both the absent class and the integrity of the judicial process by monitoring the actions of the parties before it.

The Court of Appeals did not distinguish among these distinct interests. It reviewed all possible interests that in its view had a bearing on whether an appeal of the denial of certification should be allowed. These diverse interests are interrelated, but we distinguish among them for purposes of analysis, and conclude that resolution of the narrow question presented requires consideration only of the private interest of the named plaintiffs.

A

The critical inquiry, to which we now turn, is whether respondents' individual and private case or controversy became moot by reason of petitioner's tender or the entry of judgment in respondents' favor. Respondents, as holders of credit cards issued by the bank, claimed damages in their private capacities for alleged usurious interest charges levied in violation of federal law. Their complaint asserted that they had suffered actual damage as a result of illegal acts of the bank. The complaint satisfied the case-or-controversy requirement of Art. III of the Constitution.

As parties in a federal civil action, respondents exercised their option as putative members of a similarly situated cardholder class to assert their claims under Rule 23. Their right to assert their own claims in the framework of a class action is clear. However, the right of a litigant to employ Rule 23 is a procedural right only, ancillary to the litigation of substantive claims. Should these substantive claims become moot in the Art. III sense, by settlement of all personal claims for example, the court retains no jurisdiction over the controversy of the individual plaintiffs.

The factual context in which this question arises is important. At no time did the named plaintiffs accept the tender in settlement of the case; instead, judgment was entered in their favor by the court without their consent and the case was dismissed over their continued objections.5 Neither the rejected tender nor the dismissal of the action over plaintiffs' objections mooted the plaintiffs' claim on the merits so long as they retained an economic interest in class certification. Although a case or controversy is mooted in the Art. III sense upon payment and satisfaction of a final, unappealable judgment, a decision that is "final" for purposes of appeal does not absolutely resolve a case or controversy until the time for appeal has run. Nor does a confession of judgment by defendants on less than all the issues moot an entire case; other issues in the case may be appealable. We can assume that a district court's final judgment fully satisfying named plaintiffs' private substantive claims would preclude their appeal on that aspect of the final judgment; however, it does not follow that this circumstance would terminate the named plaintiffs' right to take an appeal on the issue of class certification.

Congress has vested appellate jurisdiction in the courts of appeals for review of final decisions of the district courts. 28 U. S. C. § 1291. Ordinarily, only a party aggrieved by a judgment or order of a district court may exercise the statutory right to appeal therefrom. A party who receives all that he has sought generally is not aggrieved by the judgment affording the relief and cannot appeal from it. Public Service Comm'n v. Brashear Freight Lines, Inc., 306 U.S. 204 (1939); New York Telephone Co. v. Maltbie, 291 U.S. 645 (1934); Corning v. Troy Iron & Nail Factory, 15 How. 451 (1854); 9 J. Moore, Federal Practice ¶ 203.06 (2d ed. 1975). The rule is one of federal appellate practice, however, derived from the statutes granting appellate jurisdiction and the historic practices of the appellate courts; it does not have its source in the jurisdictional limitations of Art. III. In an appropriate case, appeal may be permitted from an adverse ruling collateral to the judgment on the merits at the behest of the party who has prevailed on the merits, so long as that party retains a stake in the appeal satisfying the requirements of Art. III.6

An illustration of this principle in practice is Electrical Fittings Corp. v. Thomas & Betts Co., 307 U.S. 241 (1939). In that case, respondents sued petitioners for infringement of a patent. In such a suit, the defense may prevail either by successfully attacking the validity of the patent or by successfully defending the charge of infringement. In Electrical Fittings the decree of the District Court adjudged the patent valid but dismissed the complaint for failure to prove infringement. The respondents did not appeal, but petitioners sought review in the Court of Appeals of so much of the decree as adjudicated the patent valid. Respondents filed a motion to dismiss the appeal "based on the ground that the appeal can raise no questions not already moot because of the fact that the [petitioners] have already been granted in the dismissal of the bill all the relief to which they are entitled." 100 F.2d 403, 404 (CA2 1938). The Court of Appeals dismissed the appeal on this ground after ruling that the decree of the District Court would not in subsequent suits, as a matter of collateral estoppel or otherwise, influence litigation on the issue of the patent's validity. On review here, this Court did not question the view that the ruling on patent validity would have no effect on subsequent litigation. Nevertheless, a unanimous Court allowed the appeal to reform the decree:

Although the Court limited the appellate function to reformation of the decree, the holding relevant to the instant case was that the federal courts retained jurisdiction over the controversy notwithstanding the District Court's entry of judgment in favor of petitioners. This Court had the question of mootness before it, yet because policy considerations permitted an appeal from the District Court's final judgment and because petitioners alleged a stake in the outcome, the case was still live and dismissal was not required by Art. III. The Court perceived the distinction between the definitive mootness of a case or controversy, which ousts the jurisdiction of the federal courts and requires dismissal of the case, and a judgment in favor of a party at an intermediate stage of litigation, which does not in all cases terminate the right to appeal.7

B

We view the denial of class certification as an example of a procedural ruling, collateral to the merits of a litigation, that is appealable after the entry of final judgment.8 The denial of class certification stands as an adjudication of one of the issues litigated. As in Electrical Fittings, the respondents here, who assert a continuing stake in the outcome of the appeal, were entitled to have this portion of the District Court's judgment reviewed. We hold that the Court of Appeals had jurisdiction to entertain the appeal only to review the asserted procedural error, not for the purpose of passing on the merits of the substantive controversy.

Federal appellate jurisdiction is limited by the appellant's personal stake in the appeal. Respondents have maintained throughout this appellate litigation that they retain a continuing individual interest in the resolution of the class certification question in their desire to shift part of the costs of litigation to those who will share in its benefits if the class is certified and ultimately prevails. See n. 6, supra. This individual interest may be satisfied fully once effect is given to the decision of the Court of Appeals setting aside what it held to be an erroneous District Court ruling on class certification. In Electrical Fittings, the petitioners asserted a concern that their success in some unspecified future litigation would be impaired by stare decisis or collateral-estoppel application of the District Court's ruling on patent validity. This concern supplied the personal stake in the appeal required by Art. III. It was satisfied fully when the petitioners secured an appellate decision eliminating the erroneous ruling from the decree. After the decree in Electrical Fittings was reformed, the then unreviewable judgment put an end to the litigation, mooting all substantive claims. Here the proceedings after remand may follow a different pattern, but they are governed by the same principles.

We cannot say definitively what will become of respondents' continuing personal interest in their own substantive controversy with the petitioner when this case returns to the District Court. Petitioner has denied liability to the respondents, but tendered what they appear to regard as a "nuisance settlement." Respondents have never accepted the tender or judgment as satisfaction of their substantive claims. Cf. Cover v. Schwartz, 133 F.2d 541 (CA2 1942). The judgment of the District Court accepting petitioner's tender has now been set aside by the Court of Appeals. We need not speculate on the correctness of the action of the District Court in accepting the tender in the first instance, or on whether petitioner may now withdraw its tender.

Perhaps because the question was not thought to be open to doubt, we have stated in the past, without extended discussion, that "an order denying class certification is subject to effective review after final judgment at the behest of the named plaintiff. . . ." Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1978). In Livesay, we unanimously rejected the argument, advanced in favor of affording prejudgment appeal as a matter of right, that an adverse class certification ruling came within the "collateral order" exception to the final-judgment rule. The appealability of the class certification question after final judgment on the merits was an important ingredient of our ruling in Livesay. For that proposition, the Court cited United Airlines, Inc. v. McDonald, 432 U.S. 385 (1977). That case involved, as does this, a judgment entered on the merits in favor of the named plaintiff. The McDonald Court assumed that the named plaintiff would have been entitled to appeal a denial of class certification.

The use of the class-action procedure for litigation of individual claims may offer substantial advantages for named plaintiffs; it may motivate them to bring cases that for economic reasons might not be brought otherwise.9 Plainly there has been a growth of litigation stimulated by contingent-fee agreements and an enlargement of the role this type of fee arrangement has played in vindicating the rights of individuals who otherwise might not consider it worth the candle to embark on litigation in which the optimum result might be more than consumed by the cost. The prospect of such fee arrangements offers advantages for litigation by named plaintiffs in class actions as well as for their attorneys.10 For better or worse, the financial incentive that class actions offer to the legal profession is a natural outgrowth of the increasing reliance on the "private attorney general" for the vindication of legal rights; obviously this development has been facilitated by Rule 23.

The aggregation of individual claims in the context of a classwide suit is an evolutionary response to the existence of injuries unremedied by the regulatory action of government. Where it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages, aggrieved persons may be without any effective redress unless they may employ the class-action device. That there is a potential for misuse of the class-action mechanism is obvious. Its benefits to class members are often nominal and symbolic, with persons other than class members becoming the chief beneficiaries. But the remedy for abuses does not lie in denying the relief sought here, but with re-examination of Rule 23 as to untoward consequences.

A district court's ruling on the certification issue is often the most significant decision rendered in these class-action proceedings.11 To deny the right to appeal simply because the defendant has sought to "buy off" the individual private claims of the named plaintiffs would be contrary to sound judicial administration. Requiring multiple plaintiffs to bring separate actions, which effectively could be "picked off" by a defendant's tender of judgment before an affirmative ruling on class certification could be obtained, obviously would frustrate the objectives of class actions; moreover it would invite waste of judicial resources by stimulating successive suits brought by others claiming aggrievement. It would be in the interests of a class-action defendant to forestall any appeal of denial of class certification if that could be accomplished by tendering the individual damages claimed by the named plaintiffs. Permitting appeal of the district court's certification ruling—either at once by interlocutory appeal, or after entry of judgment on the merits—also minimizes problems raised by "forum shopping" by putative class representatives attempting to locate a judge perceived as sympathetic to class actions.

That small individual claims otherwise might be limited to local and state courts rather than a federal forum does not justify ignoring the overall problem of wise use of judicial resources. Such policy considerations are not irrelevant to the determination whether an adverse procedural ruling on certification should be subject to appeal at the behest of named plaintiffs. Courts have a certain latitude in formulating the standards that govern the appealability of procedural rulings even though, as in this case, the holding may determine the absolute finality of a judgment, and thus, indirectly, determine whether the controversy has become moot.

We conclude that on this record the District Court's entry of judgment in favor of named plaintiffs over their objections did not moot their private case or controversy, and that respondents' individual interest in the litigation—as distinguished from whatever may be their representative responsibilities to the putative class12—is sufficient to permit their appeal of the adverse certification ruling.

Affirmed.

MR. JUSTICE REHNQUIST, concurring.

I write briefly to state what seems to me to be sufficient differences between this case and United States Parole Comm'n v. Geraghty, post, p. 388, to allow the appeal of the denial of class certification in this case, and to dismiss the attempted appeal of the same question in Geraghty as moot. If I were writing on a clean slate, I might well resolve both these cases against the respondents. But the Court today has not cleaned the slate or been successful in formulating any sound principles to replace what seem to me to be the muddled and inconsistent ones of the past. Compare Sosna v. Iowa, 419 U.S. 393 (1975), with Franks v. Bowman Transportation Co., 424 U.S. 747 (1976); United Airlines, Inc. v. McDonald, 432 U.S. 385, 393 (1977), with Pasadena City Bd. of Education v. Spangler, 427 U.S. 424, 430 (1976); Coopers & Lybrand v. Livesay, 437 U.S. 463, 469, 470, n. 15 (1978), with Indianapolis School Comm'rs v. Jacobs, 420 U.S. 128 (1975); and now this case, with United States Parole Comm'n v. Geraghty.

Article III, and this Court's precedents in Jacobs, supra, and Spangler, supra, require dismissal of the action in Geraghty because there is simply no individual interest remaining, no certified class or intervenors to supply that interest, and the action is not within that "narrow class of cases" that are "distinctly `capable of repetition, yet evading review.'" Gerstein v. Pugh, 420 U.S. 103, 110, n. 11 (1975). The facts in this case, in contrast, fit within the framework of the precedents permitting continuation of the action.

The distinguishing feature here is that the defendant has made an unaccepted offer of tender in settlement of the individual putative representative's claim. The action is moot in the Art. III sense only if this Court adopts a rule that an individual seeking to proceed as a class representative is required to accept a tender of only his individual claims. So long as the court does not require such acceptance, the individual is required to prove his case and the requisite Art. III adversity continues. Acceptance need not be mandated under our precedents since the defendant has not offered all that has been requested in the complaint (i. e., relief for the class) and any other rule would give the defendant the practical power to make the denial of class certification questions unreviewable. Since adversity is in fact retained, and this set of facts fits within a "narrow class of cases" where a contrary rule would lead to the "reality" that "otherwise the issue would evade review," I think our precedents provide for the maintenance of this action. Sosna, supra, at 402, n. 11; Gerstein, supra. Accordingly, I join in the opinion of the Court in this case and in MR. JUSTICE POWELL's dissent in Geraghty.

MR. JUSTICE STEVENS, concurring.

In his dissenting opinion MR. JUSTICE POWELL states that, because the District Court erroneously refused to certify the class and because no member of the class attempted to intervene, the respondents "are the only plaintiffs arguably present in court." Post, at 346. This position is apparently based on the notion that, unless class members are present for all purposes (and thus may be liable for costs, bound by the judgment, etc.), they cannot be considered "present" for any purpose. I respectfully disagree. In may opinion, when a proper class-action complaint is filed, the absent members of the class should be considered parties to the case or controversy at least for the limited purpose of the court's Art. III jurisdiction. If the district judge fails to certify the class, I believe they remain parties until a final determination has been made that the action may not be maintained as a class action. Thus, the continued viability of the case or controversy, as those words are used in Art. III, does not depend on the district judge's initial answer to the certification question; rather, it depends on the plaintiffs' right to have a class certified.1

Accordingly, even if the named plaintiff's personal stake in the lawsuit is effectively eliminated,2 no question of mootness arises simply because the remaining adversary parties are unnamed.3 Rather, the issue which arises is whether the named plaintiff continues to be a proper class representative for the purpose of appealing the adverse class determination. Cf. East Texas Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403-406; United States Parole Comm'n v. Geraghty, post, at 407. In my judgment, in this case, as in Geraghty, the named plaintiffs clearly remained appropriate representatives of the class at least for that limited purpose.4

I therefore join the opinion of the Court.

MR. JUSTICE BLACKMUN, concurring in the judgment.

I concur in the judgment because, under United States Parole Comm'n v. Geraghty, post, p. 388, respondents' appeal of the order denying class certification is not moot. I agree with the Court that the ruling on a class certification motion stands as a litigated issue which does not become moot just because the named plaintiff's suit on the merits is mooted. I would not limit appealability of this procedural motion, however, to situations where there is a possibility that the named plaintiff will be able to recover attorney's fees from either the defendant or the fund awarded to the class.

MR. JUSTICE POWELL, with whom MR. JUSTICE STEWART joins, dissenting.

Respondents are two credit card holders who claim that petitioner charged them usurious interest in violation of the National Bank Act and Mississippi law.1 They filed this action late in 1971 to recover those charges plus a penalty equal to the same amount, for individual totals of $683.30 and $322.70. App. 59. Respondents also sought relief on behalf of a class alleged to include 90,000 persons with claims aggregating $12 million. After four years of litigation, the District Court denied respondents' motion for class certification. Seven months later, petitioner tendered to respondents the full amount of their individual claims plus legal interest and court costs. Over respondents' objection, the District Court entered final judgment in their favor. Petitioner then deposited the full amount due with the Clerk of the Court.

No one disputes that the petitioner has tendered everything that respondents could have recovered from it in this action. Nevertheless, the Court of Appeals for the Fifth Circuit rejected petitioner's suggestion of mootness and reversed the denial of class certification. This Court affirms the judgment of the Court of Appeals, after finding that respondents retain a personal stake in sharing the expense of litigation with members of the putative class. Ante, at 334, n. 6, 336. This speculative interest simply will not sustain the jurisdiction of an Art. III court under established and controlling precedents. Accordingly, I dissent.

I

Although there are differences, this case is similar to United States Parole Comm'n v. Geraghty, post, p. 388, in one important respect: both require us to decide whether putative class representatives may appeal the denial of class certification when they can derive no benefit whatever from the relief sought in the action. Here, as in Geraghty, the District Court refused to certify a class. In this case, however, the Court recognizes established Art. III doctrine. It states that the "right . . . to employ Rule 23" is a "procedural right only, ancillary to the litigation of substantive claims." Ante, at 332. It also agrees that a federal court "retains no jurisdiction over the controversy" when the parties' "substantive claims become moot in the Art. III sense." Ibid. Moreover, the Court acknowledges the familiar principle that a party who has no personal stake in the outcome of an action presents no case or controversy cognizable in a federal court of appeals. Ante, at 334, 336. These are indeed the dispositive principles. My disagreement is with the way in which the Court applies them in this case. In my view, these principles unambiguously require a finding of mootness.

A

Since no class has been certified and no one has sought to intervene, respondents are the only plaintiffs arguably present in court. Yet respondents have no continuing interest in the injuries alleged in their complaint. They sought only damages; those damages have been tendered in full.2 Respondents make no claim that success on the certification motion would entitle them to additional relief of any kind from the petitioner.3 Their personal claims to relief have been abandoned so completely that no appeal was taken in their own names. The notice of appeal filed with the District Court recites that respondents appeal only "on behalf of all others similarly situated. . . ." App. 63.

This in itself is compelling evidence that respondents have no interest in the "individual and private case or controversy" relied on by the Court today. Ante, at 332. But even without such evidence, this and other courts routinely have held that a tender of full relief remedies a plaintiff's injuries and eliminates his stake in the outcome. California v. San Pablo & Tulare R. Co., 149 U.S. 308, 313-314 (1893); Drs. Hill & Thomas Co. v. United States, 392 F.2d 204 (CA6 1968) (per curiam); Lamb v. Commissioner, 390 F.2d 157 (CA2 1968) (per curiam); A. A. Allen Revivals, Inc. v. Campbell, 353 F.2d 89 (CA5 1965) (per curiam). It is the tender itself that moots the case whether or not a judgment is entered. Ibid. Thus, the law is clear that a federal court is powerless to review the abstract questions remaining in a case when the plaintiff has refused to accept a proffered settlement that fully satisfies his claims.

I know of no authority remotely suggesting that the result should differ because the District Court has entered a judgment in favor of respondents instead of dismissing their lawsuit as moot.4 It is certainly true, as the Court observes, that the entry of judgment in favor of a party does not in itself moot his case. Ante, at 332-333. There never has been any doubt that a party may appeal those aspects of a generally favorable judgment that affect him adversely. See 15 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3902 (1976); 9 J. Moore, Federal Practice ¶ 203.06 (2d ed. 1975). But the requirement of adverse effect is more than a rule "of federal appellate practice." Ante, at 333. As we have held repeatedly, and as the Court concedes, ante, at 334, 336, Art. III itself requires a live controversy in which a personal stake is at issue "throughout the entirety of the litigation." Sosna v. Iowa, 419 U.S. 393, 402 (1975). See, e. g., Preiser v. Newkirk, 422 U.S. 395, 401-402 (1975).

It is this constitutional limitation, and not any rule of practice, that has impelled federal courts uniformly to require a showing of continuing adverse effect in order to confer "standing to appeal." Barry v. District of Columbia Bd. of Elections, 188 U. S. App. D. C. 432, 433, 580 F.2d 695, 696 (1978); 15 Wright, Miller, & Cooper, supra, § 3902; see Altvater v. Freeman, 319 U.S. 359 (1943); Electrical Fittings Corp. v. Thomas & Betts Co., 307 U.S. 241 (1939); Kapp v. National Football League, 586 F.2d 644, 650 (CA9 1978); Cover v. Schwartz, 133 F.2d 541 (1942), cert. denied, 319 U.S. 748 (1943).5 As these cases show, the requirements of Art. III are not affected by the "factual context" in which a suggestion of mootness arises. See ante, at 332. Whatever the context, Art. III asks but a single question: Is there a continuing controversy between adverse parties who retain the requisite stake in the outcome of the action?

Electrical Fittings Corp. v. Thomas & Betts Co., supra, is the case primarily relied upon by the Court. It provides little or no support for today's ruling. In Electrical Fittings, a limited appeal was allowed because the petitioner himself was prejudiced by the inclusion of an unnecessary and adverse finding in a generally favorable decree. See ante, at 337. Here, the existence of the District Court's order denying certification has no effect whatever on the respondents. Thus, the personal stake that justified the Electrical Fittings appeal is not present in this case. Absent such a stake, it is simply irrelevant that "policy considerations" sometimes may favor an appeal from "a procedural ruling, collateral to the merits of a litigation." Nor is it significant that the ruling "stands as an adjudication of one of the issues litigated." Ante, at 335, 336. Collateral rulings—like other rulings—may be appealed only when the requirements of Art. III are satisfied.

B

After recognizing that the right to appeal is subject to the "jurisdictional limitations of Art. III," the Court agrees that only a "party [who] retains a stake in the appeal [can satisfy] the requirements of Art. III." Ante, at 334; see ante, at 336. The Court also agrees that respondents have no remaining stake in "the merits of the substantive controversy." Ibid. Nevertheless, it holds that respondents retain a personal stake in this appeal because they "desire to shift to successful class litigants a portion of those fees and expenses that have been incurred in this litigation and for which they assert a continuing obligation." Ante, at 334, n. 6; see ante, at 336.6 This conclusion is neither legally sound nor supported by the record.

The Court fails to identify a single item of expense, chargeable to the petitioner, that was incurred by respondents before the petitioner's tender. Similarly, respondents have been conspicuously vague in identifying the "fees and expenses" relied upon as supplying the adverse interest essential to a live controversy.7 The only expense mentioned by respondents, apart from court costs included in the petitioner's tender, is not a present obligation at all. It is an offer to provide security for costs in the event a class ultimately is certified. Brief for Respondents 33; App. 78. Nor does the attorney's fee arrangement in this case create any obligation, present or future, that can be affected by the certification of a class. Respondents' complaint identifies the fee to be paid, subject to court approval, as "twenty-five per cent (25%)" of the amount of the final judgment. Id., at 14, 16.8 No arrangement other than this customary type contingent fee is identified in the record or the briefs. Yet, no one has explained how respondents' obligation to pay 25% of their recovery to counsel could be reduced if a class is certified and its members become similarly obligated to pay 25% of their recovery. Thus, the asserted interest in "spreading [of] attorney's fees and expenses"9 relates to no present obligation. It is at most an expectation—of the respondents' and particularly of their counsel—that certain fees and expenses may become payable in the event a class is certified. That expectation is wholly irrelevant to the existence of a present controversy between petitioner and respondents.

The Court's reliance on unidentified fees and expenses cannot be reconciled with the repeated admonition that "unadorned speculation will not suffice to invoke the federal judicial power." E. g., Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 44 (1976). Such speculation is particularly inappropriate in this case, since neither the Court nor the respondents have suggested that the petitioner is or ever will be liable for the fees or expenses relied upon. Indeed, the American Rule would bar an award of attorney's fees against this petitioner. Thus, respondents' "injury"—if any exists— is not one that "fairly can be traced" to the petitioner. Id., at 41-42; see Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99 (1979).10 Whatever may be the basis for the respondents' asserted desire to share fees and expenses with unnamed members of a class, the petitioner is merely a bystander. "[F]ederal courts are without power to decide questions that cannot affect the rights of litigants in the case before them." North Carolina v. Rice, 404 U.S. 244, 246 (1971). This elementary principle should dispose of the case.

C

Since respondents have no continuing personal stake in the outcome of this action, Art. III and the precedents of this Court require that the case be dismissed as moot. E. g., Ashcroft v. Mattis, 431 U.S. 171, 172-173 (1977) (per curiam); Weinstein v. Bradford, 423 U.S. 147 (1975) (per curiam); Preiser v. Newkirk, 422 U. S., at 401-404; Indianapolis School Comm'rs v. Jacobs, 420 U.S. 128 (1975); DeFunis v. Odegaard, 416 U.S. 312, 316-320 (1974) (per curiam); North Carolina v. Rice, supra, at 246; SEC v. Medical Committee for Human Rights, 404 U.S. 403, 407 (1972).11

Respondents do not suggest that their claims are "capable of repetition, yet evading review." Cf. Gerstein v. Pugh, 420 U.S. 103, 110-111, n. 11 (1975).12 And not a single one of the alleged 90,000 class members has sought to intervene in the nine years since this action was filed. Cf. United Airlines, Inc. v. McDonald, 432 U.S. 385 (1977). Nor has anyone challenged the allegedly usurious charges by informal complaint or protest. Tr. of Oral Arg. 4. Even after certification was denied, the action lay dormant during the seven months in which respondents sought to take an interlocutory appeal, without provoking a response from anyone who previously may have thought that the class action would protect his rights. Apart from the persistence of the lawyers, this has been a noncase since the petitioner tendered full satisfaction of the respondents' individual claims. To be sure, respondents' counsel may have the same interest in an enlarged recovery that is inherent in any contingent fee arrangement. But I know of no decision by any court that holds that a lawyer's interest in a larger fee, to be paid by third persons not present in court, creates the personal stake in the outcome required by Art. III.

II

Despite the absence of an Art. III controversy, the Court directs a remand in which this federal action will be litigated by lawyers whose only "clients" are unidentified class members who have shown no desire to be represented by anyone.13 The Court appears to endorse this form of litigation for reasons of policy and practice. It is said to be an effective "response to the existence of injuries unremedied by the regulatory action of government." Ante, at 339. I am not aware that such a consideration ever before has influenced this Court in determining whether the Constitution confers jurisdiction on the federal courts. In any event, the consequences of a finding of mootness are not likely to be as restrictive as the Court seems to fear. And the Court fails to recognize that allowing this action to proceed without an interested plaintiff will itself generate practical difficulties of some magnitude.

A

A finding of mootness would have repercussions primarily in two situations. The first involves a named plaintiff who fails to obtain class certification and then pursues his case to a successful, litigated judgment. I believe that a subsequent attempt by that plaintiff to appeal the denial of certification generally would be barred by Art. III. But the consequences of applying settled rules of mootness in that situation would not be unjust. If injunctive or declaratory relief were granted, the absent members of the putative class would have obtained by force of stare decisis or the decree itself most of the benefits of actual class membership. If, on the other hand, damages were awarded and an appeal permitted, reversal of the certification ruling would enable putative class members to take advantage of a favorable judgment on the issue of liability without assuming the risk of being bound by an unfavorable judgment. Thus, the Court's decision to allow appeals in this situation will reinstate the "one-way intervention" that the 1966 amendments to Rule 23 were intended to eliminate.14

Perhaps more commonly, the mootness question will arise when the defendant attempts to force a settlement before judgment, as petitioner did in this case. A defendant certainly will have a substantial incentive to use this tactic in some cases. The Court argues that the result will be to deny compensation to putative class members and jeopardize the enforcement of certain legal rights by "`private attorney[s] general.'" Ante, at 338. The practical argument is not without force. But predicating a judgment on these concerns amounts to judicial policymaking with respect to the adequacy of compensation and enforcement available for particular substantive claims. Such a judgment ordinarily is best left to Congress. At the very least, the result should be consistent with the substantive law giving rise to the claim. Today, however, the Court never pauses to consider the law of usury. Since Mississippi law condemns the aggregation of usury claims,15 the Court's concern for compensation of putative class members in this case is at best misplaced and at worst inconsistent with the command of the Rules Enabling Act.16

The Court's concern for putative class members would be more telling in a more appropriate case. A pattern of forced settlement could indeed waste judicial resources on the litigation of successive suits by members of the putative class. I do not doubt that the consequent problems of judicial administration would be real. But these problems can and should be addressed by measures short of undercutting the law of mootness, as the Court seems to have done today. The first step should be the authorization of interlocutory appeals from the denial of class certification in appropriate circumstances.17 District courts already are empowered by 28 U. S. C. § 1292 (b) to certify such appeals when they involve certain controlling questions of law. In many cases, a class-action defendant undoubtedly would forgo the opportunity to settle with an individual plaintiff in order to obtain an immediate and final determination of the class certification question on appeal.

Where a defendant does attempt to moot a class action by forced settlement, the district court is not powerless. In at least some circumstances, it may require that putative class members receive some sort of notice and an opportunity to intervene within the appeal period. Rule 23 (d) (2). The availability of such measures could be a significant deterrent to the deliberate mooting of class actions. Indeed, district court management of the problem by measures tailored to the case at hand may well be preferable to the Court's open-ended approval of appeals in all circumstances. To the extent interlocutory appeals are unavailable or managerial powers are lacking, it is for Congress—not this Court—to correct the deficiency.18

B

Since a court is limited to the decision of the case before it, judicially fashioned "solutions" to legislative problems often are attended by unfortunate practical consequences of their own. Today's holding is no exception. On remand, respondents will serve as "quasi-class representatives" solely for the purpose of obtaining class certification. Since they can gain nothing more from the action, their participation can be intended only to benefit counsel and the members of a putative class who have indicated no interest in the claims asserted in this case. Respondents serve on their own motion— if indeed they serve at all.19 Since no court has certified the class, there has been no considered determination that respondents will fairly and adequately represent its members. Nothing in Rule 23 authorizes this novel procedure, and the requirements of the Rule are not easily adapted to it. Are respondents members of the class they seek to represent? See East Texas Motor Freight v. Rodriguez, 431 U.S. 395, 403-404 (1977). Are their currently nonexistent claims "typical of the claims . . . of the class" within the meaning of Rule 23 (a) (3)?20

The Court's holding well may prevent future "forced settlements" of class-action litigation. Thus, the difficulties faced by the District Court on remand in this case may not arise again in precisely analogous circumstances. But today's result also authorizes appeals by putative class representatives who have litigated and prevailed on the merits of their individual claims. If the order denying class certification is reversed in that situation, the named plaintiffs on remand will have no more continuing relationship to the putative class than respondents have here. A remand for certification could also lead to "one-way intervention" in direct violation of Rule 23. See supra, at 354, and n. 14. These tensions, arising from the express terms of the Rule, undermine the Court's conclusion that the policies underlying Rule 23 dictate the result reached today.

III

In sum, the Court's attempted solution to the problem of forced settlements in consumer class actions departs from settled principles of Art. III jurisprudence.21 It unnecessarily creates significant problems in the administration of Rule 23. And it may work a serious injustice in this case.22 I would vacate the judgment of the Court of Appeals and remand with instructions to dismiss the appeal as moot.